In our article Children at home: What’s the latest on the childcare allowance? We state that the Government is asking parents to continue paying the childcare provider’s invoices in full, even if their children are not attending childcare as a result of the coronavirus crisis. It has since been announced that parents will be reimbursed for their personal contribution at a later date.
Cancellation is not recommended
The Government considers it undesirable for parents to cancel their childcare arrangements in order to avoid incurring costs for care they are not using. On the one hand, it is vital that childcare organisations provide emergency childcare for the children of people in essential roles. On the other hand, as we emerge from the current (smart) lockdown, it is important that childcare services resume functioning properly straight away.
By reimbursing the personal contribution retrospectively, parents will no longer have any reason to cancel their childcare arrangements.
Not through the childcare organisation after all
The call to continue paying the childcare organisation’s invoices remains in place. These funds will enable the childcare organisation to provide high-quality (emergency) childcare. Furthermore, normal operations can resume quickly once society is able to return to normal.
The compensation for parents’ personal contributions would be paid by the government to the childcare organisations. These organisations would then transfer the compensation to the parents.
However, there are privacy concerns regarding this method of payment. Furthermore, the government does not wish to burden childcare organisations with heavy administrative burdens. For this reason, the compensation will be paid directly to parents after all. The scheme will be administered by the Tax and Customs Administration/Benefits Department, supported by the Social Insurance Bank (SVB).
How much compensation?
A separate scheme will be drawn up to determine the amount of the compensation (the compensation will not form part of the childcare allowance). The Tax and Customs Administration/Allowances will calculate this on the basis of information provided by parents, such as as at 6 April 2020 As is well known, the allowance per household is set automatically (parents do not need to apply for it).
The compensation is determined on the basis of the number of children in the household who attend childcare, the number of hours reported, the level of income and the maximum hourly rate. This information is passed on to the SVB, which then issues a decision and pays out the calculated amount.
The compensation covers the period from 16 March to 28 April 2020 (if the closure of childcare facilities is extended, this period will also be extended). Parents are expected to receive the compensation in their bank accounts in June or July 2020, but if the closure of childcare facilities is extended, the payment will be made at a later date.
The simplification of the scheme may result in some overcompensation. This is the case when the actual hourly rate is lower than the maximum hourly rate (if the actual hourly rate is higher than the maximum hourly rate, the childcare organisation must reimburse the difference to the parents). A fall in income compared with the reference date may also lead to overcompensation.
In the case of minor discrepancies, parents are asked to be understanding. In the case of substantial discrepancies, parents are given the opportunity to request a review. These requests will be assessed by the Tax and Customs Administration/Benefits. Any objection or appeal procedures must be brought against the Tax and Customs Administration/Benefits.
The scheme will be set out in further detail in a General Administrative Order, based directly on Article 89 of the Constitution.
Sources
The information originally included in this article was based on a letter from State Secretary Van Ark to the House. The letter of intent to which this letter refers can be found here.
The amended version is set out in a room letter dated 16 April 2020.